The problem isn’t Obama’s policies – it’s Congress’s

“It’s always important to remind people that under business as usual, we’re losing jobs, including manufacturing jobs, every day. But where we have strong policies to create continued demand, we’re seeing actual job growth,” notes CAP clean energy expert Kate Gordon.

California, which has had the most aggressive and consistent renewable energy target, has seen a big increase in clean energy manufacturing jobs: Between 1995 and 2008, green jobs grew three times faster than the job rate in the state as a whole, and manufacturing jobs were over 20% of all green jobs created.

A recent piece from Dow Jones on green jobs highlighted a key problem in today’s national clean energy market: While the industry has seen a substantial increase in renewable energy projects under development, the number of permanent jobs has been low. But the piece missed the real story.

The article points out that, despite offering billions of dollars in loan guarantees by the Department of Energy to renewable energy project developers, only a few hundred of the 6,000 construction jobs created are permanent.

“Overall, the federal loan guarantees have so far committed $9 billion to power generation from solar, wind, and geothermal developers. These projects are due to create 328 permanent jobs and 6,000 construction jobs, according to the Department of Energy. Manufacturing projects qualified for $1.15 billion and are due to generate more jobs — 2,775 permanent and 3,670 construction jobs — than all the generation projects.”

Of course, Louisiana Representative John Fleming doesn’t seem to understand this. In an attack on the industry on the House floor yesterday, Fleming scolding the government for putting money “into so-called ‘alternative energy,’ with so-called phony ‘green jobs’ that we’re yet to see being produced. Wind and solar, et cetera.” Watch the video:

Even with tens of thousands of direct and indirect clean energy jobs being created over the last couple of years, uninformed members of Congress continue dragging their feet. This brings us to the root of the problem: Congress itself.

The alternative to the lack of permanent jobs, according to sources in the story, would be to increase manufacturing incentives:

“In addition, some believe that the existing federal programs, even if they were geared more to manufacturing, wouldn’t be sufficient to make manufacturing in the U.S. attractive.”

Curiously, no one in the story mentions the elephant in the room: Congress has still not passed a long-term target for renewable energy. You can offer all the manufacturing tax credits and loan guarantees you want – if you have no national target for clean energy, it’s hard for many companies to justify making the investment. That is the primary reason for the limited increase in manufacturing.

Alan King, the VP of Operations for Canadian Solar, a company with most of its manufacturing in China, summed it up when I spoke to him at a conference last month:

“Well it seems like I hear all the time about the tables being tilted against U.S. manufacturing because of Chinese government support for their industry”¦I think it’s really to the detriment of the U.S. because the U.S. doesn’t have a program to support renewable energy. And as a result industry is forced to move to lower cost manufacturing areas in order to be competitive.”

I asked King what factors would need to be in place for Canadian Solar to invest in U.S. manufacturing. His answer: Greater, more widely-dispersed demand due to the creation of a national target. Without a national target, the company won’t consider it.

In the last 5 years, Congress has debated a renewable energy target 15 times. But political bickering and a lack of vision has stopped any action. It doesn’t look like we’ll see any movement under the current Congress either.

At the same time, with the exception of an 8-year extension of the Investment Tax Credit for solar, Congress has failed to extend long-term tax credits for the wind, hydro, geothermal and bioenergy industries. So the renewable energy industries get stuck with 1-2 year extensions of tax credits while the oil and gas industries enjoy permanent tax credits. (For more on the tax problem, see yesterday’s post: “ExxonMobil pays a lower effective tax rate than you.”)

Without any long-term clarity beyond a year or two, companies simply don’t want to put their eggs in the U.S. basket quite yet.

“Manufacturers need to know there’s consistent demand in order for it to be worthwhile to invest in the capital equipment they need, and to keep parts in stock,” says Kate Gordon, VP of Energy Policy at the Center for American Progress. “If we keep building our markets on a state by state basis through vulnerable RES policies, and on a stop-start basis through time-limited tax credits, we won’t get the manufacturing capacity.”

“It’s always important to remind people that under business as usual, we’re losing jobs, including manufacturing jobs, every day. But where we have strong policies to create continued demand, we’re seeing actual job growth,” she says.

The direct responsibility for a long-term target and tax credit extensions rests at the feet of Congress, not the President. We can offer loan guarantees for projects, but without long-term tax credits and a national target, the permanent jobs won’t rise to their full potential.

Check out the full interview with Canadian Solar’s Alan King on the value of a renewable energy target below.

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7 Responses to The misguided attacks on green jobs

It’s just unbelievable how many benefits derive from switching to green energy- clean air, low GHG emissions, reduction of our trade deficit, incentives to cut back on our military budget, job creation, and, above all, saving lives that are currently ending in cancer wards and blown up military vehicles- many of which are carrying oil.

This transformation is opposed for one reason: our politicians have been bribed and intimidated by the oil, gas, and coal companies, whose executives are ignorant and evil hillbillies with bad haircuts, and whose major stockholders are the indolent rich, who think that they will be able to hide behind their privet fences on Long Island and their gated estates in Brentwood while the climate disintegrates.

We didn’t switch from horses and buggies to cable cars and autos until the manure got so deep in our cities’ streets that people couldn’t take it any more. This time, unfortunately, the manure stays there for generations.

Not quite sure I understand the concept of a national renewable energy target. This means we would set a percentage of our total power consumption derived from clean energy? Like when Obama says 35% by such and such year, except actually mandated by legislation?

Also, how would the mechanics of this play out? Would this then require congress to pass the necessary subsidies and credits and such to meet said target?

Sounds like it’d be a very comprehensive, extensive package of legislation, and thereby sadly out of reach.

Kasra —
Sorry if it wasn’t clear. The target would be for a certain date, similar to what Obama proposed. The typical number thrown around is 25% renewable energy by 2020 or 2025. This requires utilities to procure that amount of their electricity by the target date — they would track the procurement through “Renewable Energy Credits” which are a tradeable credit representing the environmental benefit of the electricity.

Looking forward, as we enter the election cycle for the Nov. 2012 election, there are perhaps four possible “ways to go” with respect to the question of President Obama and his responsibilities and performance related to climate change and renewable energy. I raise this point because of the present post’s subtitle, “The problem isn’t Obama’s policies — it’s Congress’s”.

In no particular order:

The first would be for CP to stick entirely to the science and to avoid assessments (political, economic, etc.) of who is to blame and of who should be doing a better job of what. But this approach would be silly, of course, and wouldn’t be adding to the necessary and urgent dialogue. CP does express views and take stands on these other issues, and necessarily so.

The second would be for CP to speak with multiple and fragmented “voices” with respect to President Obama’s performance (on climate change and energy matters). Perhaps he’s doing a good job? Perhaps not? Perhaps the present failures are mainly Congress’s fault to the degree that if Obama’s strategy had been different it wouldn’t have mattered anyhow? (But even so, what about that strategy going forward?) Perhaps he should be re-elected unconditionally by Democrats, or perhaps large numbers of Democrats should actively voice real conditions that, if not met, would result in votes going to a different Democratic primary candidate or a third party?

The third would be for CP to basically “give in” to the notion that, because a Republican President would be a disaster for responsible efforts to address climate change and the related energy issues, for four years anyhow, we must unconditionally support President Obama no matter what he does, or how poorly he performs, with respect to climate change and clean energy. No conditions.

The fourth is to NOT be fatalistic about it and to NOT be tied to some sort of unconditional support. This approach would involve honest, deep, and (where appropriate) critical assessments of performance and what should be done differently. Indeed, it would involve conditions: For example: IF President Obama’s strategy and approach change, and IF he demonstrates such change (not merely more promises), THEN and only then will he deserve another term.

The issue here, of course, rises above the question of individual policies that are supported or not supported. The issue involves strategy, tactics, overall verve, commitment, and ultimately overall effectiveness. (The climate doesn’t care about good intentions and charisma.) We may agree with President Obama’s stated “policy hope” on any given policy and yet still see that he isn’t using the bully pulpit to communicate to the public enough to prompt and push effective policy-making throughout the entire government. Again, ultimately only effectiveness counts.

Given the nature of CP, it seems to me that CP will ultimately have to make some choices and take a coherent stand of some sort on this, or else default in a fragmented and probably incoherent way by pretending not to have a stand or by offering multiple stands. In the end, though, the ultimate question is something like this: Will votes for Obama effectively be offered, and made, UNconditionally, even in light of the failures of his current approach to climate change and achieving real progress, to educating and galvanizing the public, and to showing strong and effective leadership? Or will CP take a strong and clear stance on what needs to be done and of what should be asked of, expected of, and demanded of President Obama in order for him to deserve and win votes for a second term?

It seems to me that, to some degree at least, these are questions that are very real and that won’t go away. We won’t get very far by merely blaming Congress, nor will we get very far by electing President Obama for a second term IF he’s going to stick to the same strategy, even if he drinks more coffee each morning or whatever.

I’d like to vote for and elect this person: A President Obama that actually GETS IT and who will actually BE EFFECTIVE. On the other hand, I don’t want to (and won’t) vote again for this person: A President Obama who doesn’t show that he gets it and who adopts strategies and approaches that ultimately don’t get the necessary job accomplished. In my view, at this point it’s up to President Obama to actually DEMONSTRATE that he’s the first person and not the second, by showing verve and commitment NOW and not merely by making promises about what he’ll do next time.

Whether by means of some sort of incoherent default, or by means of a well-considered editorial stance, it seems to me that CP will ultimately convey, at least in tone, some assessment and view having to do with President Obama, his performance, necessary changes to his approach, the wisdom of reelecting him (or not), and the conditions under which reelection would be warranted. Realize that it’s not an impossibility — it’s not out of the question — that the best (and perhaps only) way ultimately to get the U.S. (and the political system, and us) to a point where REAL progress can be made might just need to involve going through a deeply jarring and unproductive period of four years, with a Republican president, in order to get ourselves to the point where we demand REAL progress in the following cycle, and actually achieve it. It’s not at all clear that four more years of ineffective strategy and insufficient policy progress would be the best way, ultimately, to “get to where we need to be”.

Will people give President Obama a free ticket to his next term (I’m speaking of Democrats) or will people have requirements, conditions, and expectations regarding what he’ll need to do, and demonstrate now, in order to win their votes one more time? I for one am not happy with the present degree of progress or with the present strategy. More than words and “hope” will be necessary.

I thought the USA was famed for it’s “can do” attitude. Why is it so diffficult for you to envisage a national renewable energy target? The European Union which is made up of 27 countries with different cultures, languages and political persuasions managed to agree targets years ago.

[JR: We envisage it and advocate for it. But the minority rules in the Senate.]

You could say that with just about any policy, the problem is with where his priorities lie, his lack of speaking up & actively promoting anything unless he`s in political trouble with his “base”. He should be moving these conversations forward, not being apathetic & passing the buck. We need passion & articulation surrounding green & climate issues. I honestly dont know where he stands on any of them other then when he gives the most simplistic easy 2 cents he can on rare occasions, he beats around the bush so he doesn`t ruffle the feathers of deniers tooo bad. He`s def NOT moving the subject forward like it needs to be. He`s a political coward who always takes the path of least resistance.